Gold, Silver futures retreat from record highs on profit booking and Fed comments

New Delhi: Gold and silver prices retreated from their record highs in futures trade on Wednesday as traders booked profits at elevated levels, dragging the precious metals lower, while markets digested cautious remarks from US Federal Reserve Chair Jerome Powell on the path of potential interest rate cuts.

On the Multi Commodity Exchange (MCX), gold futures for October delivery dropped Rs 408 or 0.36 per cent, to Rs 1,13,428 per 10 grams as traders pared their holdings after the metal scaled an all-time high of Rs 1,14,179 per 10 grams on Tuesday.

Similarly, the December contract for gold fell Rs 353, or 0.31 per cent, to Rs 1,14,486 per 10 grams after touching a lifetime peak of Rs 1,15,139 per 10 grams.

Silver futures also eased and retreated from their peak, with profit-taking weighing on sentiment.

The white metal futures for December delivery slipped Rs 221, or 0.16 per cent, to Rs 1,34,841 per kilogram. The March next year contract shed Rs 121, or 0.09 per cent, to Rs 1,36,271 per kg.

Globally, bullion retreated from historic peaks. Gold futures for December delivery traded 0.44 per cent lower at USD 3,799.07 per ounce, after scaling a historic high of USD 3,824.60 per ounce on Tuesday.

Silver futures for December delivery also slipped 0.44 per cent to USD 44.41 per ounce.

Commodities market experts attributed the decline to profit-taking and Federal Reserve Chair Jerome Powell's warning that there was no "risk-free path" for monetary policy.

Powell said cutting rates too aggressively could force the Fed to reverse course if inflation persists, while holding policy restrictive for too long could damage the labour market.

On Tuesday, Fed Chair Powell reiterated a balanced approach to monetary easing, warning that cutting rates too quickly could risk leaving "the inflation job unfinished," while delaying easing for too long could unnecessarily weaken the labour market.

He added that policy remains "modestly restrictive," giving the Fed room to respond to changing conditions.

Last week, the US central bank cut its benchmark rate by 25 basis points. Market participants are currently pricing in the likelihood of two more reductions before the year-end, a factor that capped losses for bullion.

"Meanwhile, heightened geopolitical tensions in Eastern Europe and the Middle East continued to underpin safe-haven demand, limiting the downside for gold and silver prices," an expert said.